Northglenn sales and use tax down through May; city staff flags revenue risks for 2026 budget

City staff told the Northglenn City Council on July 14 that citywide sales and use tax collections were down roughly 2.5% through May compared with the same period last year, a shortfall officials said will play a role in 2026 budget planning.

Deputy City Manager Jason Loveland, presenting the May 2025 financial update, said auto use tax and general sales tax were weaker while food sales were a bright spot. "Citywide sales and use tax are down 2.5 percent compared to the same period last year," Loveland said, and he listed sector specifics that staff is tracking.

Why it matters: Sales and use tax are a major general-fund revenue source for the city budget. Loveland told council the retreat toward lower collections is notable because, excluding 2009 and 2020, Northglenn has historically posted year‑over‑year sales growth. The May report shows specific pressure in discretionary categories and an ongoing decline in marijuana tax receipts compared with pre-pandemic levels.

Key figures and fund-level context provided by Loveland: - Sales and use tax: down about 2.5% through May year over year. - Auto use tax: down about 5.3%. - Marijuana tax: down 11.3% through this reporting period and approximately 25% below 2019 levels. - Food tax: up about 7.9%. - General Fund revenues: $13.7 million (about a 1% decrease, roughly $113,000 less than 2024 through May). - General Fund expenditures: $16.5 million spent, about 40.5% of annual appropriation (typical range 40–42%). - Water Fund revenues: $4.4 million, up about 3.3%. - Wastewater Fund revenues: $2.4 million, up about 8.7%, reflecting rate increases and new development (Carl’s Farm mentioned). - Out-of-state/online sales: top-line category up nearly 14%; excluding that category, in-town brick-and-mortar collections were down about 6%.

Loveland said the city had budgeted conservatively for 2025 and that the forecast for 2025 revenues was around $28.2 million, noting the 2026 estimate currently stands near $31 million and includes a $3.5 million reallocation that was formerly dedicated to the water fund. He told council staff will continue monitoring trends and will incorporate the data into the August budget discussions and possible community budget retreat.

Council members asked for context comparing local collections with regional indices; Loveland said staff uses regional CPI and other macro indicators in forecasts and that the Denver metro CPI is currently forecast near 2.2 percent. Council member Kondo asked whether the city correlates revenue performance to major indices; Loveland said staff does take those measures into account when forecasting.

Loveland also noted some operational details across funds: restricted water revenues and debt-service collections, timing of capital spending that affects fund expenditure percentages, and one-time changes such as receipt of previously ordered sanitation vehicles. He said staff will return with slides and more detailed revenue-by-area reports as the budget process continues.